Category: ecommerce

While they are experiencing significant revenue growth, their corrupt employees are experiencing wind fall gains from corrupt practices.

Purchase managers at Myntra, snapdeal, Be Stylish and Fashion and U are taking kickbacks between 4-10% of the revenue given to each vendor. This is enough money that a lot of these purchase managers have left these companies and created there own entities. So.. a purchase manager responsible for a 10cr /year ($4M) category can take between 40Lacs to 1 crores a year from these kickbacks. This is easily between 5-20 times their yearly wages. So.. no surprises that it works the way it does.

Of course ,this will not surprise any body brought up in India. Bit is does shed light on lack of controls at these companies as they chase between 30-100% growth year on year. Some ungodly big numbers have been mentioned here. Clearly there is a lot of money to be made on and off the books.

Lets look at the reported revenue growth being experienced by these companies. Please treat these numbers as ballpark estimates made by reading various news articles by me.

Revenues(USD)

2012-13

2013-14

2015 goals

Myntra

$83,333,333

$133,333,333

$250,000,000

Snapdeal

–

$100,000,000

$200,000,000

More information on these companies valuations can be found in this economic times article

If you are a below 35 chances are that you are buying or have bought digital media like music, movies, ebooks etc on iTunes, Amazon or any other digital marketplace. But, I dont think you have realised that can’t sell it or pass it on to you kids, as you could in the past.

Physical media is easy to resell and pass on and rent. And, its legal since its covered by the first-sale doctrine in the USA and similar laws in other countries. Digital media, as of today cannot be resold or passed on. That said, I see no way of really enforcing this as I can pass on any music and movies I own. So, this is all very confusing.

Apple says that you cannot burn music bought from iTunes to a CD but you can copy it to a USB drive – really! Thankfully, the idea of protecting music was dropped by Apple in 2009. So, now you can burn any purchased music to a CD or copy or it to a USB drive, which means that purchased media is no longer tied to your machine and can be passed on to anyone – but not legally. And, you still cannot sell it.

Selling “used” digital music just like to could sell used records or CDs is not legal but Redigi is fighting hard to build a marketplace for used digital media. I just do not see them succeeding because used digital goods are exactly the same as the original. They do not age or scratch or stop playing unless the format goes away, like minDV for example. So, it will always be better to buy the same asset cheaper on redigi than from the publisher or the record label. Now, the way redigi works is not completely unencumbered. There’s way too much big brother code it in to make it worthwhile to use this service right now. I do not want them to track what music I own and how I secured access to the digital media files on my machine.

So… technological pace has once again overwhelmed laws and judiciary. As of right now, they judges are trying to figure out how to interpret old laws like the first sale doctrine, in 2012-2013, without giving too much power to the copyright owner. The recent ruling gives the publisher monopolistic rights on digital content. So, it seems like its game over for Redigi.

Redigi has come up with Redigi v2.0 -using the pace of tech to its advantage – and will try to appeal this ruling. I think they’ll burn out of capital and engineers before they see a favorable ruling.